This anonymised composite case study describes how a mid sized healthcare group right sizes E5 to E3 where it fits. It reflects the kind of engagement we run rather than a single named client, and no real organization, logo, or person is identified. The figures are illustrative of a typical outcome. It sits among our case studies and supports the wider digital workplace cost optimization program.
Situation
The organization was a healthcare group of roughly 1,400 staff across several sites, spanning clinical teams, administrative functions, and a small corporate centre. Like many healthcare providers, it had standardised on Microsoft 365 E5 across almost the entire workforce. E5 had been chosen years earlier for its advanced security and compliance capabilities, which mattered given the sensitivity of patient data, and the decision had never been revisited. Every renewal simply carried the same plan forward for everyone.
The overspend found
The review found that the group was paying the full E5 premium for a large population that used almost none of what distinguishes E5 from E3. The advanced security, compliance, and analytics features that justify E5 were genuinely needed by clinical staff handling patient records and by a subset of administrators, but a large share of seats belonged to roles whose needs were comfortably met by E3. The organization was, in effect, buying its highest tier for everyone to protect the minority who truly required it.
Source: Microsoft 365 plan documentation for E3 and E5 (microsoft.com), as of June 2026. Plan contents and pricing change often; any tier decision should be confirmed against current Microsoft documentation and your own usage data.
Approach: how the healthcare group right sizes E5 to E3 where it fits
The work followed the right sizing sequence we apply across the estate, described in license right sizing. First, we mapped which E5 specific features were actually in use and by whom, using real telemetry rather than assumption. Then we segmented the workforce by genuine need: roles that required E5 capabilities, and roles fully served by E3. Crucially, the exercise was led by what each role used, so no clinical or compliance sensitive function lost a feature it depended on.
With the segmentation agreed, we modelled the licensing mix, confirmed the security posture would be preserved for the roles that needed it, and timed the change to the Microsoft agreement renewal so the tier reduction could be made cleanly rather than mid term. The renewal timing discipline behind this is the same one we describe in the SaaS renewal calendar and why it matters.
Outcome
The group moved a large share of its E5 seats to E3, keeping E5 only where clinical and compliance roles genuinely required it. The licensing change reduced Microsoft 365 spend by roughly a quarter of the prior annual cost, with no loss of capability for any role that needed the advanced tier. Because the change was matched to the renewal and validated against real usage, it was achieved without disruption to clinical workflows and without weakening the security and compliance controls protecting patient data.
| Measure | Before | After |
|---|---|---|
| Workforce on E5 | Nearly all staff | Clinical and compliance roles only |
| Workforce on E3 | Minimal | Majority of seats |
| Microsoft 365 annual spend | Baseline | Reduced by about a quarter |
| Security posture for sensitive roles | E5 protection | E5 protection retained |
Lessons for buyers
The first lesson is that a plan tier chosen once tends to outlive the reasoning behind it. E5 was the right call for the roles that needed it and the wrong default for everyone else, but nobody had revisited the split. The second is that right sizing a tier is not about cutting protection, it is about matching the tier to the role, so the people who need E5 keep it while the rest stop paying for capability they never touch. The third is timing: aligning the change to the renewal made it clean and low risk. Buyers who segment by real usage, preserve the high tier where it matters, and act at renewal can take out significant Microsoft 365 cost without any loss of security. This is the heart of our Microsoft 365 optimization work.